Allied London is rumoured to be in talks with InterContintental Hotels Group over anchoring its The Manchester tower in Spinningfields.

Allied appointed Knight Frank's London hotel team last October to find an operator for the five-star hotel element of its £150m mixed-use development on the edge of Spinningfields.

Sources close to Allied said IHG, which operates under seven different brands, would most likely run the hotel under its flagship InterContinental Hotels & Resorts brand as Allied was keen to have a five-star offer and many of the other IHG names are below that or already catered for in Manchester. Other marques in the group are Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites and Candlewood Suites.

The only existing InterContinetal in the UK is the London Park Lane. The InterContinental Hotels & Resorts brand has 150 hotels around the world and more than 60 in the development pipeline.

A spokeswoman for IHG declined to comment on speculation but added: "As part of our target of creating net organic growth up 50,000 to 60,000 rooms by the end of 2008, IHG is constantly looking for opportunities to expand its family of brands across Europe and around the world in strategic locations and countries."

The 24-storey The Manchester, pictured, designed by renowned architect Make, would total 300,000 sq ft. The lower 12 floors would be used for a 200-room hotel with conference facilities and the upper 12 floors residential. Allied is seeking a joint venture development partner for the project as it does not want to take ownership of the hotel.

Manchester developer Bruntwood is also seeking a five-star hotel operator for its planned tower at Riverside nearby.